By Adriel Bettelheim CQ Staff
Published: 02-13-09
With his approval ratings soaring and the economy in an apparent free fall President Obama used Monday nights nationally televised press conference to apply a strategy Ronald Reagan embraced nearly three decades ago.
Obama gave Congress a strong prod to enact a giant economic recovery package reasoning that tough times give newly elected chief executives the latitude to float bold ideas and make them their singular focus. Obama said inaction could turn a crisis into a catastrophe and I refuse to let that happen."
Still Obama has a limited amount of time to jump-start a rebound that will inspire sustained public confidence in his agenda.
Though he insists he inherited the crisis as a result of eight years of misguided Republican policies Obama in time will come to own" the economy and bear responsibility for it.
Should job losses mount and credit remain frozen he could be blamed for mounting an expensive and misguided recovery effort unless it produces demonstrable results. As a result there was a certain urgency to Obamas message mixed with warnings about tough times ahead.
We can no longer afford to wait and see and hope for the best" Obama told a town hall meeting in hard-hit Elkhart Ind. on Monday before his first televised press conference. This crisis has been a long time in the making and we know that we cannot turn it around overnight. Recovery will likely be measured in years not weeks or months. But we also know that our economy will be stronger for generations to come if we commit ourselves to the work that needs to be done today."
Obamas message resembled the one Reagan delivered to a joint session of Congress after 29 days in office in February 1981 as he confronted an economic downturn and national unemployment cresting above 7 percent.
We can no longer procrastinate and hope that things get better" Reagan said at the time. Unless we act forcefully and now the economy will get worse."
Reagan got the budget cuts and defense build-up he sought from Congress. Yet he couldnt avert a punishing recession in 1981 and 1982 that doused his promises of economic prosperity and for a time threatened his re-election prospects before rebounding.
Obama senior adviser David Axelrod said that most Americans are desperate for action pointing to a new Gallup poll showing 51 percent of those surveyed believe the stimulus is critically important" to improving the economy. Another 29 percent said it is important while 16 percent of those surveyed said it is not that important."
A Pew Research Center poll conducted between Feb. 4-8 found Obama actually is more popular than the stimulus package hes flogging with a job approval rating hovering around 64 percent.
But public opinion experts say the strong public support could fade quickly with more grim news or if Americans begin to experience recession fatigue" as the administration pursues more expensive relief packages to stimulate housing markets and expedite lending to consumers and businesses.
While he is generally seen as honest and authentic Obama still has to overcome a nagging perception among many Americans that the government is not up to the task of pump-priming the economy out of recession.
There also is a belief stoked by years of congressional earmarking that stimulus packages rewards some people and projects that dont deserve it. These factors have clearly stiffened Republican opposition to the Obamas signature package.
Obama tried to dispel some of the skepticism by saying the economic crisis justifies large-scale intervention.
It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs" Obama said.
Lessons from History
Many presidents have borne blame for economic conditions that resulted from broader factors than their fiscal policies. Gerald R. Ford and Jimmy Carter for example presided during a decade of inflation and stagnant wages largely stemming from surging oil prices.
President George Bush was weighed down by a recession and budget deficits linked to Reagans tax cuts and military buildup in the 1980s.
Leading Democratic consultants reckon that in the current environment Obama has between 12 to 18 months to show some positive economic results an unusually long honeymoon brought about by the depth of the crisis and Obamas success at laying blame for the financial crisis on the Bush administration and his GOP allies.
This economy is the creation of eight years of misguided policies and the last election was a clear rejection of that" said Democratic pollster Geoffrey Garin. People understand it will take a long time to dig out and the more Republicans obstruct the presidents efforts to do what he was elected to do the more they will continue to be identified with the economy."
Democratic pollster Stan Greenberg said Obama has insulated himself from potential stimulus-related fallout by pledging accountability through innovations like a Web site called recovery.gov that will track how the money is spent. He also benefits from having the relief package move so early in his presidency.
But Greenberg and others predict Obama will invariably take full ownership of the economy because of the ambitious initiatives his administration is studying.
The Treasury Department this week is due to outline how it intends to spend the approximately $350 billion remaining in the governments Troubled Asset Relief Program or TARP (PL 110-343) to stabilize the banking system. And some of Obamas boldest proposals addressing taxes health care and other sensitive issues will surface in a proposed fiscal 2010 budget an outline of which will emerge later this month.
Right now we have a crisis and the stimulus is a defining vote" Greenberg said adding the president will face a much tougher political sales job if theres a housing bill or a second TARP that involves real money and thats harder to explain."
Bush administration veterans and Republican consultants say the economy already belongs to Obama because unlike Reagan the presidents party controls both houses of Congress. They say Obama might actually be dampening consumer confidence and making things worse by downplaying expectations for a recovery.
Hes in a difficult position but laying blame on his predecessor wont work for very long" said J.D. Foster associate director for economic policy at the White House Office of Management and Budget from 2002 to 2007. People will realize this is a global recession with global causes and some countries are in worse shape than we are in. You cant blame all that on President Bushs policies."
Even if the economy rebounds consultants say it could take some time for the public to believe conditions are improving and to translate that into voting behavior.
But Greenberg predicts Obamas culpability will be tempered by his Republican opponents obstinacy.
At some point you own the economy" Greenberg said. Maybe after a housing bill or a $1 trillion bailout. But this crisis is so deep ... if things go to hell much more he might share the economy."
